This year, the commercial office market faced formidable challenges stemming from a combination of rising interest rates and persistent economic uncertainty. Now, the impact was particularly evident in the Greater Toronto Area (GTA), where commercial investment activity experienced a significant decline during the second quarter of the year, plummeting by 27%.

Perhaps facing the most substantial challenges, the office market experienced a staggering 61% decrease in transactions between 2022 and 2023. This decline was primarily attributed to the reluctance of many employees wanting to return to physical office spaces, even as their companies encouraged it. The result was a significant surplus of unoccupied office spaces available for rent. Interestingly, despite these hurdles, the industrial sector, encompassing properties like factories and warehouses, managed to perform relatively well. Investors showed a keen interest in industrial properties, largely because they provided stable returns. Looking ahead, it's anticipated that the commercial real estate market will continue to grapple with these challenges throughout the remainder of 2023.